How to Check and Increase Your Credit Card Limit Easily

How do Banks Determine Your Credit Card Limit?

When you apply for a credit card, your bank determines your credit limit. In case you avail the FinBooster: YES Bank - BankBazaar Co-Branded Credit Card, the credit fitness report will be provided every month. This can help improve your credit score. This is done by taking multiple factors into consideration. These include:

• Your annual income
• Your age
• The debt you currently have
• The amount of credit in your name
• Your employment status

And most importantly, your credit limit is determined by:

• Your credit history
• Your credit score

Do note that if this is your first credit card, chances are that you might have a low credit limit. In such cases, the banks do not know if they should take a risk on you. If you use your card often and make payments on time, you can increase your limit.

How to Increase Credit Card Limit

The steps to increase the credit card limit are mentioned below: 

• Improve Your Credit Score: Maintain a strong repayment record and use your card regularly for bill payments to build creditworthiness and become eligible for a higher limit.  

• Pay Bills on Time: Clear outstanding dues promptly and pay future bills before the due date to demonstrate responsible credit behaviour.  

• Maintain Low Credit Utilisation: Keep your credit usage below 30% of the available limit to improve your credit score and show better financial discipline.  

• Provide Proof of Higher Income: Submit updated salary slips or income proofs after a raise or additional income source to support your request for a limit increase.  

• Reduce Existing Debts: Lower your EMIs, loan obligations, and other credit liabilities before applying for a higher credit limit.  

• Apply for a New Credit Card: Consider a new card with a higher limit if you have a good repayment history and strong credit profile. 

Benefits of Increasing the Credit Limit on Your Card

You probably already have surmised some of the benefits of increasing the credit limit on your card, but here they are just so you know how an increase in your card's credit limit can help you:

Lowers Your Credit Utilisation Ratio: You probably already know this. But the importance of maintaining a low credit utilisation ratio cannot be stated enough. The lower the ratio the higher your CIBIL score.

Makes It Easier to Get Loans: A high credit limit that you do not use makes banks and lenders look at you more favourably. Thus, getting approved for a loan becomes that much easier.

Helps During an Emergency: A higher credit limit always comes in handy during a financial or a health emergency.

Access to Perks: Most credit cards that come with a high credit limit also come with many perks such as airport lounge access, membership to hotels, etc.

What is the Credit Utilisation Ratio? 

Credit Utilisation Ratio is also called the debt-to-credit ratio. It measures how much of your available credit is being used through your outstanding balance.  

Formula: Credit Utilisation Ratio = Outstanding Balance ÷ Total Credit Limit  

• Ideal Ratio: Maintaining a ratio below 30% is recommended, as higher usage may indicate financial stress or poor credit management.  

• Impact of Credit Limit Increase: Increasing your credit limit can help lower your utilisation ratio, but it may temporarily affect your credit score as lenders may view it as added risk.  

• Timely Repayments Matter: Consistently paying dues on time can help improve your credit score over time, even after a temporary dip. 

Difference Between Total Credit Limit and Available Credit Limit

If you have scrutinised your statement, you will see that there are two limits mentioned - your total credit limit and your available credit limit.

So, what exactly are these?

Your total credit limit is the amount above which if you spend, the bank will charge you a penalty. This is basically the same as the credit limit mentioned early on.

Your available credit limit, on the other hand, is the amount you currently have available to spend.

Why Your Credit Limit Matters

You now know what your credit limit is. This information should be enough for your day-to-day credit card related transactions, right?

Well, not quite.

Remember that all-important credit score? Well, your credit limit indirectly ties into it.

It ties into it with the help of a widely used ratio which is used to calculate the current amount you owe on your card compared to the total credit extended to you and is expressed as a percentage.

The formula for the same will be:

• Credit utilisation ratio = (Outstanding balance on all credit cards/Total credit extended on all credit cards) x 100

It is generally advisable to keep your credit utilisation ratio under 30%.

What Does This Ratio Mean?

The Credit utilisation ratio measures how much credit you use. High ratio makes you appear credit hungry and may lead to default. Lenders see it as a sign of poor financial management. 

This, in turn, leads to a reduction in your credit score making it that much harder for you to get a loan.

A low credit utilisation ratio means you pay bills on time and manage finances well, making you a good option for lenders. This increases your credit score and increases the likelihood of loan approval. Lenders can hedge their bets on your financial stability.

Using an Example to Understand Credit Utilisation Ratio

How to Manage Your Credit Limit? 

The steps to manage your credit limit are mentioned below: 

• Keep Credit Utilisation Low: Maintain your credit utilisation ratio below 30% to support a healthy credit score and better financial management.  

• Enable Auto-Payments: Set up automatic bill payments to avoid missed due dates and additional finance charges.  

• Use Balance Transfers Wisely: Transfer outstanding balances to interest-free credit cards when possible to reduce interest costs.  

• Avoid Frequent Cash Withdrawals: Limit cash advances on your credit card, as they usually attract high fees and interest charges. 

How does your credit card limit affect the credit score?

Credit score is used by banks to determine creditworthiness. Credit limit and utilization ratio affect credit score. Use credit limit wisely to keep score high. Credit utilization ratio should be 10-30% to maintain score.

• Minimizing the use of credit card
• Ensuring credit card payments are done in full and on time
• Having alternative sources of income
• Minimizing additional liabilities

How to Check Credit Limit Online? 

To check the credit limit online follow the below-mentioned steps: 

• Log in to your credit card portal or mobile banking app using your credentials.  

• Go to the account summary section to view your available credit, current balance, and total credit limit.  

• You can also check your latest account statement for detailed credit limit information.  

Check Credit Limit Via Customer Care 

• Contact customer care through the dedicated helpline number for credit card queries.  

• Verify your identity and request details about your credit limit from the support executive.  

Check Credit Limit Via Net Banking 

• Log in to your net banking account securely.  

• Navigate to the credit card section to access your credit limit and related card details.  

Check Credit Limit Via Calls and SMS 

• Use the automated phone banking service to check your credit limit by following the IVR instructions.  

• Register for SMS alerts to receive regular updates about your credit limit and card usage.  

• You may also visit the nearest bank branch for in-person assistance regarding your credit limit.  

What Determines Your Credit Limit? 

The factors that determine the credit limit are mentioned below: 

• Your credit limit is decided based on factors such as income, repayment history, credit score, existing liabilities, and overall creditworthiness.  

• Banks may offer lower limits to first-time users until they establish responsible spending and repayment habits.  

• Timely repayments and disciplined credit usage can improve your chances of receiving a higher limit over time

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